HK ushers in new era of pay-TV

<p>The Hong Kong government has granted five new pay-TV licences in </p><p>the territory, bringing the potential number of channels on offer to 149 </p><p>over the next six to 18 months. </p><p><BR><BR> </p><p>Industry analysts said more TV players would create a further fragmented </p><p>TV scene in Hong Kong, where the market has been dominated by local </p><p>media powerhouse TVB. </p><p><BR><BR> </p><p>Growing pay-TV households, lowered subscription fee, pressure on TV rate </p><p>hikes by terresterial stations, greater demand for quality programming </p><p>and more flexible TV packages will be some of the issues triggered by a </p><p>more open and competitive market scene, according to a MindShare </p><p>study. </p><p><BR><BR> </p><p>The five licences have been given to Hong Kong Network TV, Elmsdale, </p><p>Pacific Digital Media, Hong Kong DTV Company and Galaxy Satellite </p><p>Broadcasting. </p><p><BR><BR> </p><p>A total of 10 applications were submitted for the licences. </p><p><BR><BR> </p><p>The five successful applicants will invest capital of HK$700 </p><p>million (US$90 million) over the next three years in the pay-TV </p><p>and digital communications platform. </p><p><BR><BR> </p><p>Currently, PCCWHKT's iTV and Wharf's Cable TV are the only pay-TV </p><p>operators in Hong Kong. </p><p><BR><BR> </p><p>However, their share of the TV adspend pie is mimimal, with Cable TV </p><p>only taking up four per cent of the total TV adspend. </p><p><BR><BR> </p><p>The government has also stipulated that in granting a licence to Galaxy, </p><p>which is owned by local terrestrial broadcaster TVB, neither parties are </p><p>permitted to engage in activities involving cross-subsidies or </p><p>preferential treatment. In addition, the beneficial ownership of TVB and </p><p>its associates in Galaxy must be below 50 per cent of total shareholding </p><p>of Galaxy. </p><p><BR><BR> </p><p>Further consolidation will occur in the pay-TV scene, with industry </p><p>watchers keeping a close eye on TVB, Star TV and PCCWHKT's involvement </p><p>in Hong Kong's small broadcasting market, where doubts remain as to its </p><p>capacity. </p><p><BR><BR> </p>